2014 Global health care sector outlook

Shared challenges, shared opportunities

The coming years look to be a positive but challenging time for the global health care sector; one in which many historic business models and operating processes will no longer suffice amid rising demand, continued cost pressures, lack of or inadequate care facilities, and rapidly evolving market conditions.

The report examines the current state of the global health care sector, provides a snapshot of activity in a number of geographic markets, and suggests considerations for stakeholders as they address funding, cost and other issues while seeking to grow revenue and market share in 2014 and beyond.

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Sector issues in 2014

Among drivers for growth in the global health care sector are an aging population, rising incidence of chronic diseases, increasing access to care; technological advancements and product innovation; and emerging market growth. Yet health care organizations also must address major issues in 2014 like navigating the impact of health care reforms in many countries; rising costs; quality issues; lack of infrastructure in many parts of the world; workforce issues; and safety and privacy concerns. The challenges and opportunities emanating from each of these areas can be both global and market-specific.

Issue #1: Aging population and rise of chronic disease

The shared, long-term trends of an aging population and an increase in people inflicted with chronic diseases are expected to drive demand for health care services in both developed and emerging economies in 2014 and beyond. The aging population, which is expected to more than triple again over the next half-century, and increasing life expectancies are expected to place a huge burden on the health care system in many markets. Another shared demographic trend creating increased health care demand is the spread of chronic diseases – heart disease, stroke, cancer, chronic respiratory diseases, diabetes, and mental illness, among others – which are, by far, the leading cause of mortality in the world, representing 63 percent of all deaths, and can be attributabled to the aging population, more sedentary lifestyles, diet changes, and rising obesity levels, as well as improved diagnostics.

Issue #2: Cost and quality

Whether a country is spending nearly 18 percent GDP on health care (like the U.S.) or recession-riddled Europe, which is spending around 10 percent, public and private funding systems are economically stressed –across the globe,rising costs are unaffordable and unsustainable. Health care cost increases can be attributed to numerous factors, such as industry consolidation, prolonged hospital stays, expensive biologics and diagnositcs which are outpacing traditional therapies, inefficient processes, and overuse of medicines. Unfortunately, higher costs do not necessarily correlate to better results or higher-quality care, even in developed countries. Sometimes, the biggest danger to patients is not their disease but the hospitals that treat them.

Issue #3: Access to care

Improving health care access is a major goal of governments around the world, and a centerpiece of many reform efforts in many countries. While facilitating increased health care access is an important and worthy endeavor, more people in the system means more demand for services that numerous health care systems are unable to accommodate due to workforce shortages, patient locations, and infrastructure limitations, in addition to the cost issues identified earlier. Many countries across the globe are facing a challenge to meet their required number of health care workers, a shortage that directly affects the quality of care. Uneven distribution of caregivers is also a problem. Patient location can be another deterrent to care. A third constraint on patient access is lack of health care infrastructure in certain countries and outdated facilities in both developed and emerging markets.

Issue #4: Technology

Across the world, health care systems are recognizing the need for innovation; advances in health technologies and data management can help facilitate new diagnostic and treatment options; however, these same advances are likely to increase overall costs, prompting widespread efforts by public and private health care providers and insurers to contain expenditure by restructuring care delivery models and promoting more efficient use of resources. Health care technology changes will be rapid and, in some parts of the world, disruptive to established health care models. Yet, acquiring and leveraging technology innovations require financial investments that many health care providers – even in developed economies – may struggle to afford in an era of cost-cutting and reform. The technology-enabled, transforming health care system is producing an immense volume of information and, more specifically, how to interpret and use that data will be important. Much rides upon its availability, integrity, and confidentiality. Potential patient safety, economic, and reputational damage may also arise if organizations lack appropriate security and privacy controls.

Market updates

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